The People’s Bank of China added further funds to the financial system to ease a cash shortage, while a gauge of China’s manufacturing shrank. Netflix Inc. jumped 16% today. Data today showed jobless claims rose by 1,000 to 326,000 in the period ended Jan. 18.
Equities: The MAR14 E-mini S&P 500 (CME:ESH14) has declined this morning by almost 1% down to 1822. We believe the next target is 1800 according to our market profile analysis. As we have noted, we have been thinking that the 1840 area was going to be a high region at least for Q1, and now we believe that even more so. 1833 is our significant resistance level for this market. With the China manufacturing data disappointing, the market decided to do some long-liquidation. In front of next week’s Fed meeting, we could see more selling as the Fed may do another taper.
Bonds: The bonds have rallied a good amount this morning on the weak China data, with the MAR13 30-year bond (CBOT:ZBH14) up 28 ticks to 131’30. We would not at all be surprised to see more rallying in the bonds, as we also believe the terrorism talk surrounding the Sochi Olympics may be providing a boost to bonds today, and perhaps going forward. Our key support level is 131’09, and our next major upside level is 133.
Currencies: Euro-area consumer confidence increased more than economists forecast in January, helping to cause a very solid rally in the MAR14 Euro (CME:E6H14) up to 136.76, up 130 ticks. The MAR14 U.S. Dollar Index (NYBOT:DXH14) is down a solid 60 ticks today to 80.70. The MAR14 Aussie dollar (CME:A6H14) has not found any major buying interest yet, even as it is over 200 ticks below the 90 level. Today it is down 71 ticks to 87.43. The MAR14 Yen (CME:J6H14) is one we are watching closely, as it has rallied 64 ticks today to 96.45. Our next upside target is around 98.15. 95.50 seems to be a solid base at this point.
Commodities: FEB14 gold (COMEX:GCG14) has found some very strong buying interest this morning, up $23 to $1,261. To us, the $1,255 level is extremely important for gold. Now that is has broken above this level, we look for the next target to be $1,273, as this is a key Fibonacci retracement level. FEB14 natural gas (NYMEX:NGG14) is up again today, reaching a high of almost $4.95 before coming back down to current prices at $4.80. We believe the rally may stall from here, but would not be surprised to see another push toward $5. The intense cold weather has likely been a huge boost to natural gas prices.